The growing Hispanic population in the United States is one key driver behind the trend, Russo said. According to the U.S. Census Bureau, approximately 54 million Hispanics lived in the U.S. as of July 2013, accounting for 17 percent of the population. That's up from 13 percent in 2000, according to Pew Research.

With these numbers comes a more voracious spending power. A separate Nielsen report found that Hispanics' spending power in 2013 was $1.2 trillion; by 2018, that figure is expected to rise to $1.6 trillion.

But it isn't just a robust presence in the U.S. that's behind the revenues. The culture's fondness for beauty products, and the fact that its U.S. residents tend to be younger than the general population, are also contributing factors.

"There's a lot of different dynamics that support that growth," Russo said. He added that U.S.-born Hispanics, who tend to be well-educated and more assimilated into the country's culture, tend to outspend foreign-born Hispanics. The average U.S.-born Hispanic household spends an average $275 on beauty each year, compared with $267 for foreign-born Hispanics. That number drops to $213 annually for non-Hispanics.

Despite the purchasing power of Hispanic men and women, the industry's overall sales remain challenged, particularly in the mass market. According to a separate report by Nielsen, beauty revenue growth at mass retailers was relatively flat at 0.4 percent last year. That compares with growth of 3.4 percent in the prestige market, where products tend to carry a higher price tag and are sold mainly at department stores. The prestige segment, however, only accounts for about one-third of the industry's $33.5 billion in sales.

This trend mimics that of the broader economic recovery, which has been skewed toward more affluent shoppers, Russo said. But it also reflects the fact that there are an abundance of products in the mass channel, where many of the products' ad campaigns look the same. At an average drug store, there are 900 beauty products, he said.

Karen Grant, global beauty industry analyst at The NPD Group, recently noted that 2014 saw the fewest number of people shopping for beauty in six years.

"This tells me that beauty shoppers are happy, but some may be seeking happiness elsewhere," she wrote in a news release. "This 'elsewhere' is in other products and services, as well as experiences."

To Russo, stagnant industry sales mean that the power of the Hispanic shopper "is not being fully realized."

But that doesn't mean brands—and retailers—aren't trying. Earlier this month, Walgreens launched an exclusive color cosmetics line with Cuban actress Eva Mendes. It follows a similar move by CVS, which first tapped Mexican actress Salma Hayek for a beauty line back in 2011. And L'Oreal, the world's largest beauty company, has an entire section on its homepage dedicated to the Latina shopper.

"There's an opportunity [for the industry] to kind of tweak the strategies to really drive growth," Russo said. "You don't often get to have this conversation."